BVI next? Bermuda explores new tax law for financial services sector
Bermuda is proposing to implement a corporate income tax law that could affect large multinational companies that shelter their wealth in its financial services industry.
Bermuda’s proposal comes amid growing pressure that the world is placing on tax jurisdictions like the BVI where many rich companies and individuals are believed to be storing wealth to avoid taxes in their home countries.
In a statement released earlier this week, the Bermudan government said the proposal would end the island nation’s long-standing 0% corporate income tax policy and would now apply tax to multinational corporations with 750 million euros ($820 million) or more in annual revenue.
The Bermudan government is looking to implement the law in 2025 after it concludes a series of public consultations within its community.
Another reason Bermuda is pushing to implement this new law is that the country had signed a deal with the Organization for Economic Cooperation and Development, which promised to charge a global minimum tax (GMT) rate of 15% from high-earning companies that use its financial services.
Because it signed that deal some two years ago, the country has to take steps to honour that agreement or face consequences.
With Bermuda taking these steps, persons are now waiting to see if BVI and other Caribbean jurisdictions such as Barbados, Trinidad and Tobago, St Lucia and the Cayman Islands will implement similar laws.
All these countries and other financial services jurisdictions continue to face pressure from other countries around the world who claim that their wealthy nationals are hiding wealth in tax havens. These so-called unrealised tax payments are believed to be something that could help these same jurisdictions to recover from the global COVID-19 pandemic and other global shocks.
Recently, the United Nations signalled that it is now willing to allow all countries to set global tax laws instead of leaving this right to a few wealthy countries that always made the global tax laws in favour of the wealthy classes of the world.
Copyright 2024 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.
This is what Lorna should be looking into instead of wasting time carrying civilians to Guyana on a joy-ride
If this is done the financial services sector will move en masse to Ireland. Why would it stay here? The good roads?
Death and taxes!
time to start poaching the accounts held in Bermuda to make the BVI FS stronger
Pros & Cons impqct of Tax
Pros:
Increased Revenue: The introduction of a corporate tax rate would generate substantial revenue for the Bermudan government, which could be invested in public services, infrastructure, and other developmental projects.
Compliance with International Standards: By aligning with the global minimum tax (GMT) rate set by the Organization for Economic Cooperation and Development (OECD), Bermuda would avoid sanctions or other negative consequences from international organizations.
Positive International Image: Adhering to these international tax standards may improve Bermuda’s reputation by reducing its image as a tax haven and aligning it with global efforts to combat tax evasion.
Potential Economic Diversification: The change might encourage Bermuda to diversify its economy beyond financial services, leading to more balanced and resilient growth.
Cons:
Potential Loss of Business: Multinational companies attracted by the 0% corporate income tax might move their operations elsewhere, leading to a loss of jobs and economic activity within Bermuda’s financial services industry.
Administrative Challenges: Implementing a new tax system would require substantial changes to regulatory, administrative, and compliance frameworks, possibly leading to initial confusion and difficulties.
Effects on Other Jurisdictions: Neighboring Caribbean jurisdictions, like the BVI, Barbados, and the Cayman Islands, may feel pressured to follow suit, potentially leading to a regional shift with varying economic impacts. Some jurisdictions might benefit from a flight of capital, while others might face similar challenges as Bermuda.
Impact on Economic Recovery: The shift might deter foreign investment in the short term, possibly hindering Bermuda’s and other jurisdictions’ ability to recover from the global economic shocks of the COVID-19 pandemic.
Conclusion:
Bermuda’s proposed corporate tax changes are a significant departure from its longstanding policy and align with broader global trends toward transparency and fairness in international taxation. The impact on Bermuda and other financial services-dependent jurisdictions will depend on the final details of the legislation, the response of multinational corporations, and the reactions of other governments and international organizations. It’s a complex issue that intertwines local economic considerations with global policy and ethical considerations, making close monitoring and thoughtful implementation key to managing the potential benefits and challenges.
Well well
Once again the BVI can’t think for themselves
The always copy what other countries are doing
Bermuda because of greedy corrupt politicians are$5-$7 Billion in debt and a diminishing working population, they have no choice but to try and hide taxing their own rich people on top of the international agreement claiming it’s Europe that’s forcing them to do so in actuality there just looking for a scape goat !
Years ago BVI businesses used to (more likely were supposed to) pay I think 15% on profits. Then it was mandated that BVI could not charge local businesses this tax if not charging the rest of the world. Rather than lose the offshore component it was resolved to charge BVI 0% corporate tax on profits for local companies. It would follow that taxing overseas companies at 15% might also lead to taxing our local companies once again. Higher costs, higher prices, lower chance of wage increases in BVI. All this in addition to the many other taxes local companies already pay. Not to mention the probable loss of offshore business income!
Bermuda is not a country.
“financial services jurisdictions” = tax havens
What obtains in these Tax Havens is exactly the same as the policies colonialists like France practice in Africa. Time to take a stand against the Globalists rape of Third World Countries.
The reason they put they money in the BVI is there is NO TAX.
If you put in a tax they will leave with they money!
Don’t count yo chicken before hatch! We lucky to have what we got.
Now we just need to get the politicians hand out of the cookie jar. FOCUS Fix roads, hospitals and schools
Recently, the United Nations signalled that it is now willing to allow all countries to set global tax laws instead of leaving this right to a few wealthy countries that always made the global tax laws in favour of the wealthy classes of the world.
UNITED NATIONS??? UNITED NATIONS signalled that it is NOW WILLING to ***ALLOW***. . . . wait, WHAT?
INCREASE MINIMUM WAGE!!!!!